USD JPY in focus.

With today's jobless claims data coming in better (lower) than expected, this only adds to the narrative of the US cutting rates later (I've read an article today suggesting the first cut could come in june- if you remember, only last week, 'the market' was predicting March).

At the beginning of the year, it was widely touted that the USD was going to weaken quite strongly. And whilst my opinion is that the USD will most likely end the year lower. It currently appears that the 'weakening' has been delayed, at least until the second quarter. And with USD JPY this week breaking through daily resistance at 147.50. there isn't anything in terms of strong technical resistance all the way up to 150 and above.

Potential scenarios to halt a run up to 150 are: A slowdown in the US economy (poor data), or the BOJ indicating its own rate hike (or actually hiking). If the chart does grind up to 150 during the next couple of weeks, there will be the inevitable 'verbal jawboning' from the BOJ.

With today's trade still in play, my hands are tied in terms of placing another trade. But until something changes, I'm currently very comfortable taking JPY short trades after a pullback that creates some 1hr, or even better 4hr support.

Please email if you have any questions: johnelfedforexblog@gmail.com